ITO(Exemptions) Ward-1, Ahmedabad V. Amardham Lalgebi Ashram, Ahmedabad

ITA 3102/AHD/2015

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 6345 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 2 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-01-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2011-2012
• Appeal Filed On: 04-11-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Capital asset; Business income; Depreciation; Charitable institution; Retrospective amendment; Cost of acquisition
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD B BENCH AHMEDABAD BEFORE, SHRI PRAMOD KUMAR , ACCOUNTANT MEMBER AND SHRI S. S. GODARA, JUDICIAL MEMBER ITA NO. 3102/AHD/2015 (ASSESSMENT YEAR: 2011-12) INCOME TAX OFFICER (EXEMPTIONS), WARD 1, AHMEDABAD APPE LLANT VS. AMARDHAM LALGEBI ASHRAM AT & POST HATHIJAN, AHMEDABAD RESPONDENT PAN: AAATA1976B /BY REVENUE : SHRI MUDIT NAGPAL, SR. D.R /BY ASSESSEE : NONE /DATE OF HEARING : 01.01.2018 /DATE OF PRONOUNCEMENT : 04.01.2018 ORDER PER S. S. GODARA, JUDICIAL MEMBER THIS REVENUES APPEAL FOR ASSESSMENT YEAR 2011-12, EMANATES AGAINST THE CIT(A)-9, AHMEDABADS ORDER DATED 05.08.2015, IN CA SE NO. CIT(A)- 9/352/ITO(OSD)(EXEM)-II/14-15, IN PROCEEDINGS U/S. 143(3) OF THE INCOME TAX ACT, 1961, HEREINAFTER THE ACT. HEARD BOTH THE PARTIES. CASE FILE PERUSED. 2. THE REVENUES FIRST SUBSTANTIVE GROUND SEEKS TO REVIVE ASSESSING OFFICERS ACTION DISALLOWING ASSESSEES DEPRECIATION CLAIM OF RS.11,38,912/- BY TREATING THE SAME AS A CASE OF DOUBLE DEDUCTION I.E. BOTH FOR TH E PURPOSE OF ACQUISITION COST OF CAPITAL ASSET AS WELL AS IN COMPUTATION OF BUSINESS INCOME AFTER CLAIMING ITA NO. 3102/AHD/15 [ ITO (E) VS. AMARDHAM LALGEBI ASHRAM] A.Y. 2011-12 - 2 - DEPRECIATION, BY PLACING RELIANCE ON HONBLE KERLA HIGH COURTS JUDGMENT IN LISSIE MEDICAL INSTITUTION VS. CIT 348 ITR 344 (KERALA). THE CIT(A) HAS DELETED THE SAME BY QUOTING HONBLE JURISDICTIONAL HIGH COURTS JUDGMENT IN CIT VS. SHETH MANILAL RANCHHODDAS VISHRAM BHAVAN TRUST 198 ITR 59 8 AS WELL AS AFTER DISTINGUISHING HONBLE APEX COURTS JUDGMENT IN ESC ORTS LTD. VS. UNION OF INDIA (1993) 199 ITR 43 (SC). WE FIND NO MERIT IN REVENU ES INSTANT FORMER SUBSTANTIVE GROUND AS THE HONBLE APEX COURTS LATE ST JUDGMENT IN CIT VS. RAJASTHAN GUJARATI CHARITABLE FOUNDATION, POONA CIV IL APPEAL NO. 7186 OF 2014 DECIDED ON 13.12.2017 HOLDS THAT SUCH A DEPRECIATIO N CLAIM DOES NOT RESULT IN DOUBLE DEDUCTION. WE FURTHER FIND THAT SECTION 11( 6) STIPULATING THE SAME TO BE A DOUBLE RELIEF HAS BEEN INSERTED IN THE ACT BY THE F INANCE (NO.2) ACT, 2014 W.E.F. 01.04.2015 ONLY WHEREAS THE IMPUGNED ASSESSMENT YEA R IS 2011-12. THIS IS NOT THE REVENUES CASE THAT THE ABOVE AMENDMENT APPLIES WITH RETROSPECTIVE EFFECT. WE THEREFORE AFFIRM LOWER APPELLATE FINDINGS QUA TH E INSTANT ISSUE. 3. THE REVENUES LATTER SUBSTANTIVE GROUND PLEADS T HAT THE CIT(A) HAS ERRED IN LAW AS WELL AS ON FACT IN DELETING DISALLOWANCE OF CARRY FORWARD OF DEFICIT AMOUNTING TO RS.28,50,950/- AS FOLLOWS: 4. VIDE GROUND NO.2, THE APPELLANT HAS RAISE D FOLLOWING GROUND :- '2. THE LD. INCOME TAX OFFICER(OSD)(EXEMPTION]-II, AHMEDABAD IS NOT JUSTIFIED IN NOT ALLOWING CARRY FORWARD DEFICIENCIES OF RS. 28,59,95 0/-.' THE OBSERVED VIDE PARA-6 OF THE ASSESSMENT ORDER TH AT THERE IS NO PROVISION IN INCOME-TAX ACT WITH REGARD TO TRUST WHICH ALLOWS FO R DETERMINATION OF LOSS U/S.11 AND ITS CARRYING FORWARD TO THE SUBSEQUENT YEAR TO BE SET O FF AGAINST THE INCOME OF THE SUBSEQUENT YEAR. ADOPTING THIS ANALOGY THE AO HAS D ISALLOWED CARRY FORWARD OF LOSS OF RS. 28,59,950/-. 4.1 THE APPELLANT DURING THE APPELLATE PROCEEDINGS OFFERED ORAL ARGUMENTS AS WELL AS THE COPY OF HON GUJARAT HIGH COURT'S DECISION IN THE CASE OF CIT VS SHRI PLOT SWETAMBER MURTI PUJAK JAIN MANDAL 211 ITR 0293 WHER EIN THE HON JURISDICTIONAL HIGH COURT HAS OBSERVED AS UNDER :- 'CHARITABLE TRUST - APPLICATION OF INCOME - SET OFF OF EXPENSES IN SUBSEQUENT YEAR -THERE IS NOTHING IN LANGUAGE OF S. 11(1)(A) TO INDICATE T HAT THE INCOME FROM TRUST PROPERTY SHOULD HAVE BEEN APPLIED FOR CHARITABLE OR RELIGIOU S PURPOSES ONLY IN THE YEAR IN WHICH INCOME HAD ARISEN - EXPENDITURE INCURRED IN THE EAR LIER YEAR CAN BE MET OUT OF THE INCOME OF THE SUBSEQUENT YEAR AND UTILIZATION OF SU CH INCOME FOR MEETING THE EXPENDITURE OF THE EARLIER YEAR, WOULD AMOUNT TO SUCH, INCOME B EING APPLIED FOR CHARITABLE OR RELIGIOUS PURPOSES - THAT APART, INCOME DERIVED FRO M TRUST PROPERTY HAS TO BE COMPUTED ON COMMERCIAL PRINCIPLES - DEFICIT ARISING OUT OF E XPENDITURE OVER INCOME FOR THE ITA NO. 3102/AHD/15 [ ITO (E) VS. AMARDHAM LALGEBI ASHRAM] A.Y. 2011-12 - 3 - PREVIOUS YEAR SHOULD, THEREFORE, BE SET OFF AGAINST SURPLUS OF INCOME OVER EXPENDITURE RELATING TO SUBSEQUENT YEAR. ' 5. DECISION I HAVE CONSIDERED THE ORDER OF THE A.O. AND THE SUB MISSIONS MADE IN THIS REGARD. I AM OF THE VIEW THAT EXPENDITURE INCURRED IN EARLI ER YEARS CAN BE MET OUT FROM THE INCOME OF SUBSEQUENT YEARS AND SUCH EXPENDITURE WHE N MEET OUT FROM EARLIER YEAR INCOME WOULD BE CONSIDERED AS APPLICATION OF INCOME . FOLLOWING THE ARGUMENT AND ALSO THE RATIO LAID DOWN BY THE HON'BLE JURISDICTIONAL H IGH COURT, AS ABOVE, THE APPELLANT IS ALLOWED TO CARRY FORWARD A DEPOSIT OF RS. 28,59,950 /-. THIS GROUND OF THE APPELLANT IS ALLOWED. 4. LEARNED DEPARTMENTAL REPRESENTATIVE FAILS TO DIS PUTE THE FACT THAT HONBLE JURISDICTIONAL HIGH COURTS ABOVE REFERRED DECISION HOLDING THAT INCOME OF SUBSEQUENT ASSESSMENT YEARS CAN BE SET OFF AGAINST EXPENDITURE OF EARLIER YEARS FOR THE PURPOSES OF APPLICATION OF INCOME. WE THUS FIN D NO REASON TO INTERFERE WITH THE CIT(A)S CONCLUSION HOLDING THE ASSESSEE ENTITL ED FOR CARRYING FORWARD THE DEFICIT AMOUNT IN QUESTION. 5. THIS REVENUES APPEAL IS ACCORDINGLY DISMISSED. [PRONOUNCED IN THE OPEN COURT ON THIS THE 04 TH DAY OF JANUARY, 2018.] SD/- SD/- ( PRAMOD KUMAR ) (S. S. GODARA) ACCOUNTANT MEMBER JUDICIAL MEM BER AHMEDABAD: DATED 04/01/2018 TRUE COPY S.K.SINHA / COPY OF ORDER FORWARDED TO:- / REVENUE 2 / ASSESSEE ! / CONCERNED CIT 4 !- / CIT (A) ( )*+ ,--. . /0 / DR, ITAT, AHMEDABAD 1 +23 / GUARD FILE. BY ORDER / . // . /0